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Note:   None of the comments about stocks, ETFs etc. on this web page are recommendations and are provided for information or entertainment only. Each investor must make and be responsible for their own investment decisions.

Trading 101

I think the above picture from Stocks & Commodities, April 2011, perfectly captures the dilemma each investor must deal with.  (ie) The Market or Stock surges Up and our emotions come into play and we jump into the stock or ETF because we don't want to miss this wave Up. As the wave continues Up we may add to open positions as we grow more confident. There are two different perspectives, the guy with the smile who is growing more confident each second and the outside observer who sees the impending Decline. I believe this is the reality of the market and is why you must always take profits or hedge and have strict money management rules. Stated another way, If you do not capture or protect profits, you will go BROKE!          Schippi   May, 2011

Market Comment ( 02/10/2012) Last weeks comments were right on. Schippi scored by hedging with TVIX ( Up 17% ). Hope you did even better. Presently the market indicators have changed from all favorable to a cautionary state. Since an election is ahead, it is expected that market dips will be brief and the overall trend to be pumped Up by our glorious politicians and wonderful Fed Chief. Again, hedging your portfolio with TVIX and TZA ( up 4.18%) remain viable options, but they do require close management. Please note these are not recommendations and are provided for information only. ( 02/03/2012) The Market Indicators   for both the  Blue Chips (NYSE)  and  High Tech (NASDAQ) continue to be all  favorable. This is a strong rally and substantial gains were accumulated. The usual difficulty is how to protect these gains from a sudden reversal.  Market cycles have not been repealed so the onus remains with the investor.  TVIX  the 2x  long Volatility ( VIX ) ETF offers hedging potential. The triple small cap inverse (TZA) is another strong hedging tool. Please note, these are not recommendations.      This has been a strong move Up, and we are now approaching overhead resistance on some major stock indices, so caution is appropriate and hedging long positions is something to think about.  The good news for investors is the decline in the Fear Index ( $VIX). Schippi strongly thinks investors should time their Buys & Sells using the slope of $VIX or CVOL as the trigger. I also think this is exactly what the VQT ETF is doing on a daily basis. (ie) Long the S&P 500 and using the $VIX for dynamic hedging. ( 01/06/2012) The Market Indicators   for both the  Blue Chips (NYSE)  and  High Tech (NASDAQ) are all favorable. The regression trend of U. S. dollar continues Up.    The below all ETFs chart lists XIV and ZIV at the top of the CCP list. Both correspond to the inverse of the $VIX ( Fear Index ). This is good news and suggests buying stocks. The Level(5) program captures stocks that have suffered sharp declines and are now trying to move back up.     Long term regression analysis provides a list of  stocks that have performed the best since the last market crash.  Below is a long term monthly chart of the S&P 500. The daily up-close view of the market is usually too chaotic to make sense of. This monthly chart allows us to stand back and get an overall market view.         ALL ETFs     New code that  processes all ETFs, separately from stocks, was generated. This is an all CCP ETF. Results are as follows:      ETFs should exhibit less market volatility than stocks, so this allocation should enhance portfolio stability. ( Please use limit orders and not market orders for ETF purchases, as many have very low volume. ) ( Again, minus signs for Vel and Accel  in the CCP tables implies current weakness.  )      The below chart of the S&P 500 combines both daily and weekly Hurst envelopes and I believe it is a unique Internet chart.

 

If you process thousands of stocks with the Maximum Gain Per Unit Risk criteria, you will find the strongest of the strong. From the CCP web page.